Impact Of The Global Economic Crisis On The Agricultural Sector In Saint Lucia By Rufus Leandre
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IMPACT OF THE GLOBAL ECONOMIC CRISIS ON THE AGRICULTURAL SECTOR OF SAINT LUCIA INTRODUCTION/OVERVIEW The world today is in crisis, it comes on top of the recent increases in food prices, input prices extreme volatility of the oil market, heated polemics, public demonstration and street protests which have already taken its toll in late 2008. However, for our small and fragile economies it is too soon to have a comprehensive picture of the real consequences of the crisis that is affecting the global economic system. To date the impact of the Global Financial Economic crisis on the agricultural sector is limited and is still too early to comprehend the full social economic impact on the agricultural sector. While current Global Financial Economic Crisis is still unfolding, it is envisaged that the second round effects on the real economy will be more visible and serious. The drop in global demand, falling commodity prices, lack of credit, retreat of foreign investment will hit the sector hard. We are still largely considered as an agrarian economy, and this crisis is bound to affect our livelihoods. Other developed countries in Asia and the Pacific already began to feel the impact of the crisis during the third quarter in 2008. The strategic importance of agriculture has historically been manifested through its contribution to employment, foreign exchange earnings, food security and the socio-political stability of the economy. In our recent review of the agricultural sector we envisage major effects that the global economic down turn will have on the sector: •
It has provided very serious and significant opportunities for the sector and the country if we take immediate advantage of the present environment.
•
It is causing great concern especially for our export oriented farmers and programmes
•
Global Economic changes are affecting the context under which farmers throughout the developing world participate in the sector.
•
Economic globalization has brought about change such as liberalization of trade and Investment formulation of regional economic agreement and implementation of structural 1
adjustments projects (SAPS) and the removal of subsides and price support. While some farmers may benefit from economic globalization by shifting to production of export commodities, accessing niche markets or funding alternative sources of income related to consumer economics, many others are threatened by low crop prices, removal of subsidies, competition with cheaper imports, changes in credit availability, inability to gain access to the market and a lack of access to inputs such as high yielding seeds, fertilizer and irrigation. Likewise changes to climate are also affecting agricultural production through increased rainfall, drought and heavy winds etc. However in the past, due to the forces of globalization, many developed countries have reaped the benefits of faster economic growth, cheaper imports, new technologies and increased foreign competition. IMPORTANCE OF AGRIUCLTURE TO ST LUCIA Agriculture has been the main-stay of St. Lucia’s economy over three decades and has contributed significantly to the overall development of the island. Its contribution to national gross domestic product has declined from 10.6 in 1995 to 3.09 in 2005 and again increased to 3.26 in 2006 and 2007 respectively to 4.2 in 2008 with bananas contributing 1.7%. The banana industry has single-handedly been the principle contributor to the overall foreign exchange earnings with non-banana exports adding to this amount. However, in recent years the banana industry has declined significantly and other activities such as tourism, service industries and to a certain extent, manufacturing have become extremely important. Though other industries have emerged within the rural communities, farming still anchors most rural communities today. The decline is attributed to the decline in banana exports, occasioned by the removal of preferential market for the commodity, due to trade liberalization. The population and housing census revealed a population that is steadily shifting from rural to urban areas. The 2007 agricultural census reveled a decrease in the number of holdings in 1996 to 2007 and a decrease in land area in agriculture from 51,328 acres in 1996 to 30,204 acres in 2007 (41.6%). Over 70% of the farmers with more than 100 acres in 1996 disappeared by 2007. However, there was a substantial increase in farms under 1 acre.
2
There was noticeable and positive shift in the domestic purchase of non traditional and positive shift in the domestic purchases of non traditional crops: from 2005 - 2227 tonnes valued at EC$6.6 million; 2006 – 2692 tonnes at EC$8 million; 2007 – 2969 tonnes valued at EC$10.4 million; 2008 – 3301 tonnes, valued at EC$11.4 $million (up to mid September 08). A similar trend was recorded in the livestock and fish products see table 1,2,3. There was a noticeable decrease in food imports from 101,828 M. tonnes to 56,264 m tonnes in 2008: a decrease of 45% This drastic decline of the banana, in the earlier years, forced the government of St. Lucia to focus on a diversified agricultural strategy to achieve social development. Diversification has been promoted through the emphasis on (1) domestic markets for cabbage, tomatoes, sweet peppers, lettuce, cassava, yams, sweet potato, dasheen and other tree and fruit crops. (2) Export crop production hot pepper, breadfruit, plantain, cocoa, mango, avocado etc for the generation of foreign exchange. It is envisaged that Saint Lucia’s agricultural diversification thrust will help to bring about major benefits both at the national and farm level. The new vision for the sector is to sustain a diversified national agricultural income base and enhance the integrity of rural livelihoods systems by generating the capacity for efficiency and the competitive production and marketing of agricultural goods and services. In light of these new realities the Government of Saint Lucia in its agricultural policy 2005-2015 has identified seven (7) broad strategic directives, to: 1. increase the efficiency and competitiveness of agriculture. 2. promote the adoption of improved appropriate technological packages 3. expand and diversify agricultural production value added agro processing and the general market bases 4. enhance the national food security status 5. generate new opportunities for employment and income generation in rural areas 3
6. conserve the natural resource base, and 7. modernize legislative policy framework for optional agricultural production and trade. This vision and policy will only be realized by the active participation of all St. Lucians. OPPORTUNITES The agricultural sector provides probably the best opportunity for our country to ride out the economic downturn and come out stronger economically than ever before. The following opportunities are identified •
Farmers/producers/farmers groups and our nation on the whole should take advantage of the crisis and produce in large quantities food and root crops, vegetable and increase our livestock development programe. This will ensure food security and sovereignty for our country, and open up massive opportunity to export food to address the expected food shortages in some countries of the world.
•
We should use this opportunity to transform our economy and give agriculture its true place as the leading pillar of our society and provide it with its due weight in resource allocation. We can use the food as well as non-food crops to create industries for value addition in the country; to produce what we need to consume and to make our economy much stronger, in terms of exporting value added products regionally and extra-regionally.
•
We should investment in our human resource and increase their capacity by the formation of groups and associates, and to empower farmers to become lobbyists to negotiate for themselves.
•
Encourage farmers to strengthen their organizational skills for their business, and also further development of their skills.
•
Engender greater efficiency in the utilization of raw materials to produce more value added goods. Opportunity for using simple approaches, for example pealing of dasheen and other produce on our supermarket shelves. While no serious investment is necessary for this, it requires skill. 4
•
Training and skills development of farmers.
•
Strengthen business and financial management acumen of our stakeholders
•
Encourage farmers to become more innovative in terms of technology and inputs
•
Form partnerships between public and private sector ventures.
•
Create opportunities for famer organizations to come together under an umbrella national farmers organization; to provide ; greater support within the agricultural sector. There is presently a body that can be used if properly organized to lead the farmers in this respect (i.e.) the Chamber of Agriculture.
CHALLENGES Apart from some of the opportunities highlighted, the world economic crisis will also bring challenges to the sector. •
Higher cost of imports
•
Dwindling Market prices for agricultural produce – if the market for produce is not organized, oversupply and future decline in market process will occur.
•
Producer uncertainty
•
Because of the opportunities – exodus of large number of farmers to the agricultural sector by informal producers. Ministry of Agriculture may not have the resources to monitor the increase in production by those non produces in a timely manner for timely market forecasting.
•
Regular farmers may not be able to meet loan payments and other commitments as a consequence of over-production and oversupply, for example access to cheaper poor value foods, high cost of production – not reflected in price paid to farmers
•
Higher cost of inputs
5
•
Real risks, as a consequence of the crisis, that people would have to reduce their food intake and the number of hungry would rise further
•
When societies are in danger of collapse during severe economic turmoil for e.g. Asia in 1997, evidence significant rises in suicide and crime rates, abuse and violence against women (Heyzer et al ,1999; Knowles et al, 1999). Women bear the brunt of this social fallout.
•
It threatens to wipe out the gains painfully made over the last decade, and to reduce growth in the agricultural sector to below the level needed for this country to become a net importer of food.
SOME ACTIONS TO STIMULATE AND RIVITALIZE THE SECTOR IN THIS CRISIS These include: •
Increasing the budget for agriculture implementation from 2% to 5% to 10% in budget year 2008-2009-2010-2011.
•
Directing the Economic Partnership Agreement (EPA) funds to the agricultural sector
•
Directing more Special Framework of Assistance(SFA) funds and other grant funding to develop appropriate, meaningful projects programes to support food production in the sector.
•
Insist at the European Union (EU) level for a suspension of the Tarrification and also WTO agreement and present barrier to trade from the ACP countries.
•
Insist at EU/WTO level provision of subsidies/incentives for our farmers and farm products so as to create the enabling environment for producing cheaper local food. Create a fund for price support to consumers and assist farmers with incentives to assist food prices that would help in providing cheaper foods to the population.
•
Provision of further support and lower interest rates for lending to producers through agricultural development bank or other financial institutions with less stringent measures for farmers to take loans for enterprise development.
6
•
Establishment and initiation of a special allocation to support farmers through some form of investments bank window.
•
Create an investment pool for the purchase of farm equipment and other agro industrial equipment eg. tractors, cold storage equipment, water storage facilities for on farm production.
•
Insist at the EU level and through other funding agencies the creation of an agricultural stimulus package in support of our diversification efforts, to support our food security and sovereignty and price support mechanism and programs in the agricultural sector. Increased impetus for our support for local producers (buy local campaign) World Bank have pledged their support during the recent years.
GOVERNMENT SUPPORT STRUCTURES REQUIRED TO STIMULATE THE SECTOR In order for farmers, producers and other stakeholders in the sector to increase on their scale of production or productivity as well as their entrepreneurial and agri-business development skills, a number of measures will need to be implemented by government to ensure success: •
Accelerate the creation of a funding support mechanism to producers through Development Bank, credit union so as to gain access to credit with very low interest rates facilities for venture capital programmer.
•
Provide support to the development of an economic /agricultural development fund, to cushion the effect of any future crisis in the sector. One suggestion is a small premium on producers sold to supermarkets, hotels, etc, be collected on behalf of government and placed in a fuid to support times of economic hardship.
•
Provide increased support to farmers and provide farmers stakeholders with very advanced and improved technologies, improved seeds materials and other low cost inputs especially fertilizer and other high price inputs.
•
Create the facilitation of timely delivery of inputs.
•
Create investment opportunities for developing and purchasing of appropriate water storage structures and facilities for harvesting and developing of potential sources of water for irrigation. (to much water is being lost during heavy periods of rain). Present water 7
harvesting pilot project in the Maboya Valley should be extended to other regions. •
Create the enabling environment to provide irrigation facilities and structures for all farmers as required by 2012.
•
Provide for the orderly and sound marketing of all farmers produce development and establishment of a central market/facility to be owned and operated by farmers groups or private sector.
•
Form partnerships and alliances with all hotel and other entities on the island. Call for a review of tax incentives provided to those entities including clauses which will inform level of tax holiday and tied to the purchase of local products as a major part of the agreement for receiving Tax concession. Negotiations methods and agreement for payment to these farmers on a more timely basis. Create the enabling environment for the hotels in ensuring reliability of produce on a regular basis, the hotel should consider joint ventures investment with producers to ensure success for both parties. (agri-Tourism linkages improved and increased).
•
Seek assistance and guidance in support of imposing tariff on imported competing goods. This will have to be negotiated (CSME, WTO, etc).
If St. Lucia is to properly implement this programe, additionally, Government needs to urgently put measures in place and ensure that the Labour Code is swiftly put into law. The enactment of the labour code will encourage and promote a more efficient and productive labour force, and ensure that our farmers will get a fair day work for a fair day pay. Presently labour in the sector is about 3 hours per day. There is need for Government to formulate plans for the adoption of a Regional Farm labour Exchange programe/project. This program, needs to be well organized and supported by the people; failure to do this could lead to anarchy. Government must continue to invest in technological development, especially creating the synergies in the agricultural and energy sectors – development of solar and other forms of renewable energy on farms – including agro base renewable energy. In order to bail out the producers, buyers, processors and all stakeholders in the value chain from the impact of the Economic Crisis there is need to access:
8
•
Long-term credit facilities, it is expected that this facility will be housed in the newly established development bank which will offer long term loans at affordable rates to enable all stakeholders to sustain and develop the sector during the recession. A revolving fund facility is suggested.
•
Opportunity for Government to support a much needed Insurance programme for crop and livestock enterprise apart from bananas
•
Increased public spending and Investments in Agriculture; Government needs to create enabling environment e.g. to subsidize loans to farmers and rural infrastructure investment – China/Vietnam through stimulus packages support resulted in the improvement and sustainability of the agricultural sector, such a programme can be given consideration
•
Government through the European Union and other funding agencies for the establishment / development of a pension fund for our present and ageing population of farmers.
•
More support required for government as it relates to value added agro processing. Criteria should be set for providing incentives and concessions.
•
Seek further support and funding from government as it relates to value added and agro industrial development and processing facilities, which is presently pursued by the government.
•
Review of the present criteria as it relates to incentives and other funding support mechanism to assist producers in the development of their enterprises. Presently the Ministry of Agriculture is in the process of implementing its agricultural policy and strategy this should be enacted into law as swiftly as possible.
•
Develop strategies and programmes to turn crisis into opportunities and pursing supportive monetary and agricultural fiscal policies as it envisaged that the aid expected in the region will decline and further exacerbate the problem.
•
Maintain the macro economic fundamentals and minimize the social consequences of the crisis.
•
Undertake strategies’ long term investment in physical human capital and fiscal packages, which should be pro poor. Monetary 9
policies that are geared to keeping the agricultural financial sector liquid so that enterprises can survive. Other measures should be carried out to minimize unemployment, protect small enterprise and embark on rural development programmes. CONCLUSION In conclusion we recognize that agriculture has a major role to play as the Global Economic Crisis Saviour to our small Island State. Our recent celebration of our thirty years of independence agricultural exhibition bears testimony to the potential of the agricultural sector if given the necessary support as outlined above. We have recognized the new and emerging consumer groups which have become very busy an increased working class made up of predominately a large number of female headed households. The St. Lucain farmers has to move to another level of product development and packaging for direct sales to the supermarkets in an already prepared form on our supermarket shelves so as to save time in the normal peeling and other preparations of these products by our housewives and house husbands. The ministry is continuing its efforts in terms of value added promotion of local foods and adoption of improved technology by farmers. Every effort should be made by regional governments to implement its common regional agricultural policy suggested by President Jequed to avert the direct impact on the global economic crisis on our very important agricultural sectors. Given the present crisis agriculture is one of the sectors which can provide sustainability to this economic dilemma which has been forced on our small economics. Our government should make every effort and endeavor to further revitalize the agricultural sector and give real meaning to the agricultural sector as the true backbone of the St. Lucian economy because it touches the lives of all people / citizens (rich, poor, old, young, visitors, humans, non humans), in fact it impacts on the lives of all living things since it is the sector which is responsible for feeding our nation and visitors alike and provides its factories and agro industry with raw materials and generates a very significant portion of its foreign exchange earnings. Agriculture has contributed significantly to the sector although different sub-sectors have been affected to different degrees, however the
10
agriculture sector has not been deeply hurt by the crisis. At the same time we need to take this opportunity to lead us out of this crisis. There is no doubt that the St. Lucians producers are highly capable of the hard work and dedication needed to pull the economy out of any crisis. Our recent increases in production both in the livestock and crop sections bear testimony to our efficiency and effectiveness. If St. Lucia is to properly implement its programme we will not be subjected to the brunt of the economical and financial crisis presently being experienced by developing and some financial crisis presently being experienced by developed and some developing countries and become a more food secure and food sovereign state. There is urgent need for us to sustain our agricultural reform policy as well as renewing our focus on financial institutions for both business and famers to access funds. St. Lucia’s agriculture needs to promote good policies, sustainable public, private partnership as well as establishment of industries standards. On a national scale there is need to refocus our attention on food, water management and renewable energy production and implementing measures to stimulate development on the basis of agricultural models that are both sustainable and equitable. We can reform our agricultural policy to suit both primary and commercial agriculture to make it more attractive. In this sense the current crisis may have more positive effects on our agricultural sector. In understanding the new economic climate that is presently challenging the sector. There is need to provide our farmers, policy makers, agricultural professional and other critics in the sector in the development of their psycho-social skills, and rather than adopting the microwave philosophy on the success of an agricultural sector, that agriculture is not a quick fix. We strongly believe that agriculture is the only sector that will see the economy through the world economic recession and crisis. We need as a nation to be more patriotic and support our buy local, eat local campaigns and other programmes in particular our backyard garden, school gardening urban gardening initiatives as well as our intended support to elderly homes and community development groups including the diabetic, blind and other disadvantage groups, and by so doing to provide our people with the support to drastically reduce the high 11
prevalence of diabetes and other non-communicable by providing more wholesome food to all persons living and visiting our shores. On the American Continent plans are afoot through and initiative by the American First Lady, Michele Obama: “My hope is that through children they will begin to educate their families and that will in turn begin to educate their families and that will in turn begin to educate our communities”. I am once again appealing to all St. Lucians to support our efforts at recreating a green revolution in St. Lucia and support our recessions gardens initiative as well as our plant a tree and other initiatives and maybe together we can help spread the grow your own message right here in St. Lucia, and to use a similar message by the Obama” Can we grow it” can we beat this Global Economic Crisis – YES WE CAN.
12
13
14
15
It has provided very serious and significant opportunities for the sector and the country if we take immediate advantage of the present environment.
•
It is causing great concern especially for our export oriented farmers and programmes
•
Global Economic changes are affecting the context under which farmers throughout the developing world participate in the sector.
•
Economic globalization has brought about change such as liberalization of trade and Investment formulation of regional economic agreement and implementation of structural 1
adjustments projects (SAPS) and the removal of subsides and price support. While some farmers may benefit from economic globalization by shifting to production of export commodities, accessing niche markets or funding alternative sources of income related to consumer economics, many others are threatened by low crop prices, removal of subsidies, competition with cheaper imports, changes in credit availability, inability to gain access to the market and a lack of access to inputs such as high yielding seeds, fertilizer and irrigation. Likewise changes to climate are also affecting agricultural production through increased rainfall, drought and heavy winds etc. However in the past, due to the forces of globalization, many developed countries have reaped the benefits of faster economic growth, cheaper imports, new technologies and increased foreign competition. IMPORTANCE OF AGRIUCLTURE TO ST LUCIA Agriculture has been the main-stay of St. Lucia’s economy over three decades and has contributed significantly to the overall development of the island. Its contribution to national gross domestic product has declined from 10.6 in 1995 to 3.09 in 2005 and again increased to 3.26 in 2006 and 2007 respectively to 4.2 in 2008 with bananas contributing 1.7%. The banana industry has single-handedly been the principle contributor to the overall foreign exchange earnings with non-banana exports adding to this amount. However, in recent years the banana industry has declined significantly and other activities such as tourism, service industries and to a certain extent, manufacturing have become extremely important. Though other industries have emerged within the rural communities, farming still anchors most rural communities today. The decline is attributed to the decline in banana exports, occasioned by the removal of preferential market for the commodity, due to trade liberalization. The population and housing census revealed a population that is steadily shifting from rural to urban areas. The 2007 agricultural census reveled a decrease in the number of holdings in 1996 to 2007 and a decrease in land area in agriculture from 51,328 acres in 1996 to 30,204 acres in 2007 (41.6%). Over 70% of the farmers with more than 100 acres in 1996 disappeared by 2007. However, there was a substantial increase in farms under 1 acre.
2
There was noticeable and positive shift in the domestic purchase of non traditional and positive shift in the domestic purchases of non traditional crops: from 2005 - 2227 tonnes valued at EC$6.6 million; 2006 – 2692 tonnes at EC$8 million; 2007 – 2969 tonnes valued at EC$10.4 million; 2008 – 3301 tonnes, valued at EC$11.4 $million (up to mid September 08). A similar trend was recorded in the livestock and fish products see table 1,2,3. There was a noticeable decrease in food imports from 101,828 M. tonnes to 56,264 m tonnes in 2008: a decrease of 45% This drastic decline of the banana, in the earlier years, forced the government of St. Lucia to focus on a diversified agricultural strategy to achieve social development. Diversification has been promoted through the emphasis on (1) domestic markets for cabbage, tomatoes, sweet peppers, lettuce, cassava, yams, sweet potato, dasheen and other tree and fruit crops. (2) Export crop production hot pepper, breadfruit, plantain, cocoa, mango, avocado etc for the generation of foreign exchange. It is envisaged that Saint Lucia’s agricultural diversification thrust will help to bring about major benefits both at the national and farm level. The new vision for the sector is to sustain a diversified national agricultural income base and enhance the integrity of rural livelihoods systems by generating the capacity for efficiency and the competitive production and marketing of agricultural goods and services. In light of these new realities the Government of Saint Lucia in its agricultural policy 2005-2015 has identified seven (7) broad strategic directives, to: 1. increase the efficiency and competitiveness of agriculture. 2. promote the adoption of improved appropriate technological packages 3. expand and diversify agricultural production value added agro processing and the general market bases 4. enhance the national food security status 5. generate new opportunities for employment and income generation in rural areas 3
6. conserve the natural resource base, and 7. modernize legislative policy framework for optional agricultural production and trade. This vision and policy will only be realized by the active participation of all St. Lucians. OPPORTUNITES The agricultural sector provides probably the best opportunity for our country to ride out the economic downturn and come out stronger economically than ever before. The following opportunities are identified •
Farmers/producers/farmers groups and our nation on the whole should take advantage of the crisis and produce in large quantities food and root crops, vegetable and increase our livestock development programe. This will ensure food security and sovereignty for our country, and open up massive opportunity to export food to address the expected food shortages in some countries of the world.
•
We should use this opportunity to transform our economy and give agriculture its true place as the leading pillar of our society and provide it with its due weight in resource allocation. We can use the food as well as non-food crops to create industries for value addition in the country; to produce what we need to consume and to make our economy much stronger, in terms of exporting value added products regionally and extra-regionally.
•
We should investment in our human resource and increase their capacity by the formation of groups and associates, and to empower farmers to become lobbyists to negotiate for themselves.
•
Encourage farmers to strengthen their organizational skills for their business, and also further development of their skills.
•
Engender greater efficiency in the utilization of raw materials to produce more value added goods. Opportunity for using simple approaches, for example pealing of dasheen and other produce on our supermarket shelves. While no serious investment is necessary for this, it requires skill. 4
•
Training and skills development of farmers.
•
Strengthen business and financial management acumen of our stakeholders
•
Encourage farmers to become more innovative in terms of technology and inputs
•
Form partnerships between public and private sector ventures.
•
Create opportunities for famer organizations to come together under an umbrella national farmers organization; to provide ; greater support within the agricultural sector. There is presently a body that can be used if properly organized to lead the farmers in this respect (i.e.) the Chamber of Agriculture.
CHALLENGES Apart from some of the opportunities highlighted, the world economic crisis will also bring challenges to the sector. •
Higher cost of imports
•
Dwindling Market prices for agricultural produce – if the market for produce is not organized, oversupply and future decline in market process will occur.
•
Producer uncertainty
•
Because of the opportunities – exodus of large number of farmers to the agricultural sector by informal producers. Ministry of Agriculture may not have the resources to monitor the increase in production by those non produces in a timely manner for timely market forecasting.
•
Regular farmers may not be able to meet loan payments and other commitments as a consequence of over-production and oversupply, for example access to cheaper poor value foods, high cost of production – not reflected in price paid to farmers
•
Higher cost of inputs
5
•
Real risks, as a consequence of the crisis, that people would have to reduce their food intake and the number of hungry would rise further
•
When societies are in danger of collapse during severe economic turmoil for e.g. Asia in 1997, evidence significant rises in suicide and crime rates, abuse and violence against women (Heyzer et al ,1999; Knowles et al, 1999). Women bear the brunt of this social fallout.
•
It threatens to wipe out the gains painfully made over the last decade, and to reduce growth in the agricultural sector to below the level needed for this country to become a net importer of food.
SOME ACTIONS TO STIMULATE AND RIVITALIZE THE SECTOR IN THIS CRISIS These include: •
Increasing the budget for agriculture implementation from 2% to 5% to 10% in budget year 2008-2009-2010-2011.
•
Directing the Economic Partnership Agreement (EPA) funds to the agricultural sector
•
Directing more Special Framework of Assistance(SFA) funds and other grant funding to develop appropriate, meaningful projects programes to support food production in the sector.
•
Insist at the European Union (EU) level for a suspension of the Tarrification and also WTO agreement and present barrier to trade from the ACP countries.
•
Insist at EU/WTO level provision of subsidies/incentives for our farmers and farm products so as to create the enabling environment for producing cheaper local food. Create a fund for price support to consumers and assist farmers with incentives to assist food prices that would help in providing cheaper foods to the population.
•
Provision of further support and lower interest rates for lending to producers through agricultural development bank or other financial institutions with less stringent measures for farmers to take loans for enterprise development.
6
•
Establishment and initiation of a special allocation to support farmers through some form of investments bank window.
•
Create an investment pool for the purchase of farm equipment and other agro industrial equipment eg. tractors, cold storage equipment, water storage facilities for on farm production.
•
Insist at the EU level and through other funding agencies the creation of an agricultural stimulus package in support of our diversification efforts, to support our food security and sovereignty and price support mechanism and programs in the agricultural sector. Increased impetus for our support for local producers (buy local campaign) World Bank have pledged their support during the recent years.
GOVERNMENT SUPPORT STRUCTURES REQUIRED TO STIMULATE THE SECTOR In order for farmers, producers and other stakeholders in the sector to increase on their scale of production or productivity as well as their entrepreneurial and agri-business development skills, a number of measures will need to be implemented by government to ensure success: •
Accelerate the creation of a funding support mechanism to producers through Development Bank, credit union so as to gain access to credit with very low interest rates facilities for venture capital programmer.
•
Provide support to the development of an economic /agricultural development fund, to cushion the effect of any future crisis in the sector. One suggestion is a small premium on producers sold to supermarkets, hotels, etc, be collected on behalf of government and placed in a fuid to support times of economic hardship.
•
Provide increased support to farmers and provide farmers stakeholders with very advanced and improved technologies, improved seeds materials and other low cost inputs especially fertilizer and other high price inputs.
•
Create the facilitation of timely delivery of inputs.
•
Create investment opportunities for developing and purchasing of appropriate water storage structures and facilities for harvesting and developing of potential sources of water for irrigation. (to much water is being lost during heavy periods of rain). Present water 7
harvesting pilot project in the Maboya Valley should be extended to other regions. •
Create the enabling environment to provide irrigation facilities and structures for all farmers as required by 2012.
•
Provide for the orderly and sound marketing of all farmers produce development and establishment of a central market/facility to be owned and operated by farmers groups or private sector.
•
Form partnerships and alliances with all hotel and other entities on the island. Call for a review of tax incentives provided to those entities including clauses which will inform level of tax holiday and tied to the purchase of local products as a major part of the agreement for receiving Tax concession. Negotiations methods and agreement for payment to these farmers on a more timely basis. Create the enabling environment for the hotels in ensuring reliability of produce on a regular basis, the hotel should consider joint ventures investment with producers to ensure success for both parties. (agri-Tourism linkages improved and increased).
•
Seek assistance and guidance in support of imposing tariff on imported competing goods. This will have to be negotiated (CSME, WTO, etc).
If St. Lucia is to properly implement this programe, additionally, Government needs to urgently put measures in place and ensure that the Labour Code is swiftly put into law. The enactment of the labour code will encourage and promote a more efficient and productive labour force, and ensure that our farmers will get a fair day work for a fair day pay. Presently labour in the sector is about 3 hours per day. There is need for Government to formulate plans for the adoption of a Regional Farm labour Exchange programe/project. This program, needs to be well organized and supported by the people; failure to do this could lead to anarchy. Government must continue to invest in technological development, especially creating the synergies in the agricultural and energy sectors – development of solar and other forms of renewable energy on farms – including agro base renewable energy. In order to bail out the producers, buyers, processors and all stakeholders in the value chain from the impact of the Economic Crisis there is need to access:
8
•
Long-term credit facilities, it is expected that this facility will be housed in the newly established development bank which will offer long term loans at affordable rates to enable all stakeholders to sustain and develop the sector during the recession. A revolving fund facility is suggested.
•
Opportunity for Government to support a much needed Insurance programme for crop and livestock enterprise apart from bananas
•
Increased public spending and Investments in Agriculture; Government needs to create enabling environment e.g. to subsidize loans to farmers and rural infrastructure investment – China/Vietnam through stimulus packages support resulted in the improvement and sustainability of the agricultural sector, such a programme can be given consideration
•
Government through the European Union and other funding agencies for the establishment / development of a pension fund for our present and ageing population of farmers.
•
More support required for government as it relates to value added agro processing. Criteria should be set for providing incentives and concessions.
•
Seek further support and funding from government as it relates to value added and agro industrial development and processing facilities, which is presently pursued by the government.
•
Review of the present criteria as it relates to incentives and other funding support mechanism to assist producers in the development of their enterprises. Presently the Ministry of Agriculture is in the process of implementing its agricultural policy and strategy this should be enacted into law as swiftly as possible.
•
Develop strategies and programmes to turn crisis into opportunities and pursing supportive monetary and agricultural fiscal policies as it envisaged that the aid expected in the region will decline and further exacerbate the problem.
•
Maintain the macro economic fundamentals and minimize the social consequences of the crisis.
•
Undertake strategies’ long term investment in physical human capital and fiscal packages, which should be pro poor. Monetary 9
policies that are geared to keeping the agricultural financial sector liquid so that enterprises can survive. Other measures should be carried out to minimize unemployment, protect small enterprise and embark on rural development programmes. CONCLUSION In conclusion we recognize that agriculture has a major role to play as the Global Economic Crisis Saviour to our small Island State. Our recent celebration of our thirty years of independence agricultural exhibition bears testimony to the potential of the agricultural sector if given the necessary support as outlined above. We have recognized the new and emerging consumer groups which have become very busy an increased working class made up of predominately a large number of female headed households. The St. Lucain farmers has to move to another level of product development and packaging for direct sales to the supermarkets in an already prepared form on our supermarket shelves so as to save time in the normal peeling and other preparations of these products by our housewives and house husbands. The ministry is continuing its efforts in terms of value added promotion of local foods and adoption of improved technology by farmers. Every effort should be made by regional governments to implement its common regional agricultural policy suggested by President Jequed to avert the direct impact on the global economic crisis on our very important agricultural sectors. Given the present crisis agriculture is one of the sectors which can provide sustainability to this economic dilemma which has been forced on our small economics. Our government should make every effort and endeavor to further revitalize the agricultural sector and give real meaning to the agricultural sector as the true backbone of the St. Lucian economy because it touches the lives of all people / citizens (rich, poor, old, young, visitors, humans, non humans), in fact it impacts on the lives of all living things since it is the sector which is responsible for feeding our nation and visitors alike and provides its factories and agro industry with raw materials and generates a very significant portion of its foreign exchange earnings. Agriculture has contributed significantly to the sector although different sub-sectors have been affected to different degrees, however the
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agriculture sector has not been deeply hurt by the crisis. At the same time we need to take this opportunity to lead us out of this crisis. There is no doubt that the St. Lucians producers are highly capable of the hard work and dedication needed to pull the economy out of any crisis. Our recent increases in production both in the livestock and crop sections bear testimony to our efficiency and effectiveness. If St. Lucia is to properly implement its programme we will not be subjected to the brunt of the economical and financial crisis presently being experienced by developing and some financial crisis presently being experienced by developed and some developing countries and become a more food secure and food sovereign state. There is urgent need for us to sustain our agricultural reform policy as well as renewing our focus on financial institutions for both business and famers to access funds. St. Lucia’s agriculture needs to promote good policies, sustainable public, private partnership as well as establishment of industries standards. On a national scale there is need to refocus our attention on food, water management and renewable energy production and implementing measures to stimulate development on the basis of agricultural models that are both sustainable and equitable. We can reform our agricultural policy to suit both primary and commercial agriculture to make it more attractive. In this sense the current crisis may have more positive effects on our agricultural sector. In understanding the new economic climate that is presently challenging the sector. There is need to provide our farmers, policy makers, agricultural professional and other critics in the sector in the development of their psycho-social skills, and rather than adopting the microwave philosophy on the success of an agricultural sector, that agriculture is not a quick fix. We strongly believe that agriculture is the only sector that will see the economy through the world economic recession and crisis. We need as a nation to be more patriotic and support our buy local, eat local campaigns and other programmes in particular our backyard garden, school gardening urban gardening initiatives as well as our intended support to elderly homes and community development groups including the diabetic, blind and other disadvantage groups, and by so doing to provide our people with the support to drastically reduce the high 11
prevalence of diabetes and other non-communicable by providing more wholesome food to all persons living and visiting our shores. On the American Continent plans are afoot through and initiative by the American First Lady, Michele Obama: “My hope is that through children they will begin to educate their families and that will in turn begin to educate their families and that will in turn begin to educate our communities”. I am once again appealing to all St. Lucians to support our efforts at recreating a green revolution in St. Lucia and support our recessions gardens initiative as well as our plant a tree and other initiatives and maybe together we can help spread the grow your own message right here in St. Lucia, and to use a similar message by the Obama” Can we grow it” can we beat this Global Economic Crisis – YES WE CAN.
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